In re Estate of Mendelson

FIRST DIVISION
July 13, 1998

No. 1-96-3590

IN RE ESTATE OF ) Appeal from the
JEANETTE MENDELSON, DECEASED ) Circuit Court
) of Cook County.
(Idelle Port, )
)
Petitioner-Appellant, )
)
v. )
)
Katherine Kaberon, )
Adm'r of the Estate of )
Jeanette Mendelson, Deceased, ) Honorable
) FRANK M. SIRACUSA,
Respondent-Appellee). ) Judge Presiding.

PRESIDING JUSTICE BUCKLEY delivered the opinion of the

court:

This appeal involves a petition brought in a probate
proceeding seeking construction of a trust provision concerning
the status of a 40% interest in a condominium in which Jeanette
Mendelson, the decedent, was the sole beneficiary prior to her
death. The trial court found that the trust provision, which
designated the recipient of the 40% interest upon decedent's
death, failed or lapsed because Evelyn Jackson, the designated
beneficiary, predeceased decedent. The trial court held that the
40% interest was part of decedent's estate rather than part of
the estate of the designated beneficiary. Petitioner, Idelle
Port, an heir to the designated beneficiary's estate, appeals
from the trial court's ruling. The sole issue for our review is
whether Evelyn Jackson's interest should pass to the estate of
Evelyn Jackson or return to the estate of Jeanette Mendelson.
Statement of Facts
The following facts are taken from the petition to declare
status of real estate filed by Idelle Port and are not contested
by the administrator of the estate of Jeanette Mendelson
(Estate).
Jeanette Mendelson (decedent), at the time of her death on
November 5, 1994, was the sole beneficiary of an Illinois land
trust that held title to a condominium located at 7141 North
Kedzie, No. 110, Chicago, Illinois 60645. An amendment to the
trust, dated May 15, 1974, provided:
"JEANETTE MENDELSON with full power to assign
any or all right, title or interest herein or
otherwise to dispose of any or all of them.
In the event of the death of said JEANETTE
MENDELSON during the existence of this trust
all such right, title or interest not
previously assigned or otherwise disposed of
shall vest as follows, to-wit:
An undivided 60% interest in ARTHUR
B. MENDELSON
An undivided 40% interest in EVELYN
JACKSON"
Evelyn Jackson died on September 22, 1988, predeceasing
decedent by almost six years. The trustee, Chicago Trust
Company, considered the trust agreement ambiguous with regard to
the possible lapse of the testamentary gift of 40% interest.
Consequently, Port, who is the daughter of Evelyn Jackson and the
niece of decedent, petitioned the court for a declaration of
whether the 40% interest was part of decedent's estate or whether
it was part of Evelyn Jackson's estate.
On May 29, 1996, the trial court entered an order declaring
that the 40% condominium interest was part of decedent's estate.
Port filed a motion to reconsider on July 2, 1996, which was
denied on September 17, 1996. Port now appeals.
Discussion
Port argues that Jackson's 40% interest was a vested
remainder subject to descent or devise and, thus, did not lapse.
We disagree and find that Jackson's interest was not vested at
the time of her death and, therefore, reverts to the Estate.
As the Illinois Supreme Court has stated, the central
purpose of trust construction is to ascertain the settlor's
intent from the trust as a whole and to effectuate that intent if
not contrary to public policy. Harris Trust & Savings Bank v.
Donovan, 145 Ill. 2d 166, 172 (1991). Utilizing the same rules
of construction as apply to wills and other contracts, we should
attempt to determine the settlor's intent solely by reference to
the plain language of the trust agreement. We initially note
that the parties both agree that the trust at issue is an
Illinois land trust (see 765 ILCS 430/1 (West 1994)) and not a
conventional trust. In a conventional trust, the trustee holds
the legal title and the beneficiary holds the equitable title.
Parkway Bank & Trust Co. v. Northern Trust Co., 213 Ill. App. 3d
444, 448 (1991). In an Illinois land trust, legal and equitable
title to real property is held by the trustee and the interest of
the beneficiary is personal property. 765 ILCS 430/1 (West
1994); Parkway Bank & Trust Co., 213 Ill. App. 3d at 448-49.
Thus, the trustee is the absolute owner of real estate. First
National Bank of Barrington, Trust No. 11-1317 v. Oldenburg, 101
Ill. App. 3d 283 (1981).
Because the instant case involves a land trust and not a
conventional trust, the cases cited by Port in support of her
argument that Jackson had a vested remainder can all be
distinguished since those cases arise from an interpretation of
language included by the settlor in a conventional trust. See
First Galesburg National Bank & Trust Co. v. Robinson, 149 Ill.
App. 3d 584 (1986) (interpreting language of an inter vivos
trust); In re Estate of Capocy, 102 Ill. App. 3d 609 (1981)
(interpreting language of a savings account trust); Whalen v.
Whalen, 217 Ill. App. 3d 557 (1991) (interpreting language of
will which established a testamentary residuary trust).
In the instant case, the language of the trust agreement is
unclear as to whether the beneficiary, Jackson, must survive the
settlor, decedent, in order to receive the 40% interest in the
land. Port argues that because there was no requirement in the
1974 amendment that the remaindermen survive decedent, Evelyn
Jackson had a vested remainder. Port asserts that a survivorship
requirement cannot be implied in light of the "clear preference
in Illinois law for vesting of remainders at the earliest
possible date." One of the cases cited by Port, In re Estate of
Zukerman, 218 Ill. App. 3d 325, 332 (1991), discusses the issue
of vesting of an interest in an inter vivos trust:
"The declaration of trust immediately
creates an equitable interest in the
beneficiary although the enjoyment of that
interest is postponed until the death of the
settlor."
However, this differs from an Illinois land trust where the
trustee retains both legal and equitable title and the
beneficiary holds only a personal property interest. 765 ILCS
430/1 (West 1994). Thus, in the instant case, the equitable
element of the title to the res of the trust could not pass or
vest since the decedent did not retain an equitable interest at
the time the trust was created. Since Evelyn Jackson's interest
was not vested at the time of her death, such interest reverts to
the Estate of decedent.
Conclusion
For the foregoing reasons, we hereby affirm the decision of
the circuit court of Cook County.
Affirmed.
O'BRIEN and GALLAGHER, JJ., concur.